Advantages Of VA Loans Versus Other Loan Programs
This BLOG On Advantages Of VA Loans Versus Other Loan Programs Was Written By Gustan Cho NMLS 873293
There are huge advantages of VA Loans Versus Other Loan Programs. VA Loans are probably the best mortgage loan programs in the United States. However, not everyone can qualify for a VA Loan. You need to be a veteran of the United States Armed Services with a Certificate of Eligibility to be able to qualify for a VA Loan.
Here are some basic advantages of VA Loans Versus Other Loan Programs:
- VA Loans do not require any down payment on a home purchase.
- A veteran homeowner can get a 100% LTV Cash-Out Refinance Loan with a VA Loan with no mortgage insurance needed.
- VA Loans are guaranteed by the United States Department of Veteran Affairs.
- VA is not a lender and does not originate and fund VA Loans.
- Private lenders are the institutions that originate and fund VA Loans and VA guarantees those lenders in the event of borrower default.
- Institutions who originate, process, underwrite, fund, and service VA Loans are banks, credit unions, and mortgage companies.
- Private mortgage lenders can offer low interest rates and easy lax lending requirements on VA Loans because they know that VA will guarantee VA Loans that go into foreclosure so their losses are limited.
- There is no question of the great benefits of VA Loans Versus Other Loan Programs.
VA Loans Versus Other Loan Programs On Down Payment
VA does not require any down payment and offers 100% financing for veterans. Here are the benefits on down payment on VA Loans Versus Other Loan Programs:
- FHA requires minimum down payment of 3.5% down payment on home purchases.
- Both Fannie Mae and Freddie Mac require 3% to 5% down payment on Conventional Loans.
- USDA does offer 100% financing but lending requirements on USDA Loans are tougher than VA Loans and you cannot purchase any property you like on any location. The property needs to be in a USDA Rural Development designated area and there are debt to income ratio restrictions and maximum household income requirements as well as credit score requirements.
- FHA Loans and USDA Loans require mandatory mortgage insurance premiums.
- Fannie Mae and Freddie Mac require private mortgage insurance on loans with less than 20% equity.
- VA Loans offer no down payment, 100% down payment and no mortgage insurance premium.
- VA does have an upfront one time VA Funding Fee but the VA Funding Fee can be rolled into the VA Loan balance with no money out of the veteran’s pocket.
- VA Loan Limits are much higher than FHA and are the same as Conventional Loan Limits.
VA Loans Versus Other Loan Programs On Debt To Income Ratio Requirements
VA Loans Versus Other Loan Programs on debt to income ratio requirements are much more relaxed. Most mortgage lenders will have overlays on debt to income ratio on VA Loans. However, here are the rules on debt to income ratio on VA Loans Versus Other Loan Programs:
- VA does not have debt to income requirements on VA Loans.
- Debt to income ratio requirements are set by the individual lenders.
- The Gustan Cho Team at CrossCountry Mortgage specializes in originating and funding VA Loans With High DTI. I have closed on VA Loans with debt to income ratios as high as 60% DTI and credit scores down to 580 FICO as long as the veteran home buyer has strong Residual Income.
- The Gustan Cho Team at CrossCountry Mortgage NMLS 3029 does not have any overlays on VA Loans. The only requirement we have is a 580 FICO Credit Score.
- The Gustan Cho Team at CrossCountry Mortgage closes most of its VA Loans in 21 days or less.
VA Loans Versus Other Loan Programs With Mortgage Interest Rates
VA mortgage rates are generally lower than any other loan program in the country. VA interest rates do have pricing adjustments like other mortgage loan programs. Mortgage rates on VA Loans Versus Other Loan Programs are lower.
Here is what determines VA mortgage interest rates:
- Credit Scores: The higher the borrowers credit scores, the lower the mortgage rates on their VA Loan.
- Type of property: Single family homes have the lowest mortgage rates. Two to four unit properties have pricing adjustments and have higher mortgage interest rates on VA Loans.
- The amount of down payment does not matter because VA Loans are guaranteed by the U.S. Department of Veteran Affairs.
Qualifying For VA Loans Versus Other Loan Programs
The Gustan Cho Team at CrossCountry Mortgage does not have any overlays on VA Loans and are nationally known for closing VA Loans With No Overlays in 21 days or less.
Here are the VA Loan Requirements at CrossCountry Mortgage NMLS 3029:
- Minimum Credit Score of 580 FICO
- No debt to income ratio requirements. With an approve/eligible per Automated Underwriting System, CrossCountry Mortgage will just go off findings of the AUS
- No overlays on VA Loans
- Most lenders have overlays on VA Loans such as minimum credit score requirements between 620 and 640 and maximum debt to income ratio overlays. The Gustan Cho Team at CrossCountry Mortgage does not have any overlays on VA Loans
If you have any questions on qualifying for a VA Loan, feel free to contact Gustan Cho NMLS 873293 of The Gustan Cho Team at CrossCountry Mortgage NMLS 3029. CrossCountry Mortgage is a five star national VA lender licensed in 50 states known for its 21 day closings and not having any overlays on all government loan programs as well as Conventional Loans. Call Gustan Cho at 262-878-1965 or text Gustan Cho on his cell at 262-716-8151 for faster response. You can also email us at firstname.lastname@example.org.